The WoW Style

In 2013 The AARP, Association of Mature Americans, and the National Taxpayers Union supported the new Form 1040-SR as part of the Seniors Tax Simplification Act. However, it was first issued by the IRS only in 2018, after Trump signed the Bipartisan Budget Act (BBA). As a senior taxpayer, you can now get 1040-SR instead of the standard 1040 tax return form. For 2021, the filer’s birth date must be before January 2, 1956. If you match this only requirement, you should read this guide to learn everything about this tax form. 

What Is a 1040-SR Form?

Form 1040-SR: U.S. Tax Return for Seniors is a relatively new version of the standard Form 1040, and it’s a tax return for senior taxpayers. According to the BBA, the IRS issued a form that is more straightforward and comfortable to read for seniors who are 65 years old or older. In addition to the content simplifications, the form includes larger fonts and broader gaps so that seniors with eyesight and motoric issues can fill it out clearer. The important fact to remember is that you don’t have to be retired to use the form. 

The current version of the form is quite similar to the discontinued Form 1040-EZ that also served as a simplified 1040 version for taxpayers with standard deductions. Form 1040-SR offers a simplified filling out process for the category of seniors who don’t have complicated finances. Those seniors who do have them still have to file the standard Form 1040 tax return. 

Another important 1040 vs 1040-SR difference is that the second doesn’t carry any income limitations, and your total income during the taxable year (including the interest income) can exceed $100,000 or $1,500, respectively. 

Income categories

Using Form 1040-SR, taxpayers can report:

• income from wages
• tips
• salaries
• taxable scholarship 
• fellowship grants 
• unemployment compensation 
• Alaska Permanent Fund dividends.

The new form also lets you report distributions from qualified retirement plans, annuities, Social Security benefits, and a range of deferred-payment arrangements. Dividends, capital gains, and losses are also reportable. 

Tax deductions for form 1040-SR filers

Taxpayers who are 65 years old or more can file Form 1040-SR with a higher deduction. For example, in 2020, the deduction for married filing jointly went up to $1,300 if only one taxpayer is 65+ y.o. or up to $2,600 if both are 65+ y.o. or older. For single taxpayers, the deduction was $1,650. The standard deduction remained the same. You can figure out the size of your deduction based on your filing status. There’s a detailed chart on the first page of the blank for that purpose. 

How to Get 1040-SR Form?

You can get the PDF version of Form 1040-SR on PDFLiner. The service lets you fill out the form online or download it to fill out using any tax software you have. The platform is available for free within the trial subscription and offers a senior-friendly interface. You also have the option to get the same version of the form on the official IRS website. Both websites provide a directly printable version of this form. 

How to Fill out a 1040-SR Form?

Now that you know all the benefits and requirements of the fillable Form 1040-SR, let’s figure out how to fill it out with detailed step-by-step instruction. The form includes 4 pages.

Page 1: Personal information, deduction & lines 1-11 

To fill out this page properly, you need to:

• Check the box that describes your filing status;
• Enter your and your spouse’s personal information, including full names, Social Security Numbers (SSNs), and a detailed US or foreign address;
• Admit if you had any operations with virtual currencies during the reportable tax year;
• Standard deduction section – here, you must state if someone else can claim you or your spouse as a dependent and admit that you or/and your spouse were born before January 2, 1956. If one or both filers are blind, it must be stated here as well;
• Dependents section – here, you must identify your dependents, if any, by providing their SSNs and relationship to you. Check if they qualify for a child tax credit or a credit for other dependents. The original form lets you identify 4 dependents, but more can be added.
• Lines 1-8 – here, you have to report all the sources of the income you have, including salaries, wages, retirement benefits, Social Security, dividends, interest, etc.;
• Line 9 – calculate the total of lines 1, 2b-6b, 7, and 8 and enter the result to state your total income. 
• Lines 10-11 – these lines let you claim adjustments to income from Schedule 1 – line 22 and charitable contributions (standard deduction only). You have to subtract the total adjustment to income from the total income to state your adjusted gross income correctly. 

Page 2: Lines 12-33

This page is the same as the standard tax return form and requires you to state the size of your standard deduction from Schedule A (line 12). Use the standard deduction chart from the last page of the form to figure it out correctly. Don’t forget to submit Schedule A along with your 1040-SR if you itemize.

• Line 13 – claim business income deduction and attach Form 8995 of 8995-A;
• Line 15 – calculate the total size of your taxable income by adding standard or itemized deduction to business income deduction and subtracting the sum from line 11 (total income);
• Lines 17-23 – these lines require amounts from Schedules 2 and 3. Do the calculations to figure out the total tax size and state it in line 23;
• Line 25 a-d – claim federal income taxes withheld from your W-2, 1099, or other forms;
• Like 26 – claim the estimated tax amount based on the previous year return;
• Lines 27-32 – attach the requested schedules, claim credits, and calculate total other payments and refundable credits;
• Line 33 – calculate the total payment by adding lines 25b, 26, and 32. 

Page 3: Refund, amount you owe & validation

This is the last fillable page of the form. It requires you to:

• Calculate the refund – complete lines 34-36 to figure out the amount of tax you overpaid and state the amount you want to be refunded to you by the IRS. You can also request a custom amount to be applied to your 2021 estimated tax.
• Calculate the amount you owe and claim the estimated tax penalty amount. Information from Schedule 3 and its instruction can be required as Schedule H, and Schedule SE can be not comprehensive on the amount you owe. The details and exceptions are described on the IRS website.
• Sign and date the form along with your spouse to validate it. Occupation and identity protection PIN are optional. 

Page 4: Standard deduction chart

On this page, you can figure out the actual standard deduction amount that matches your filing status. Pay attention to the exceptions at the bottom of this page to select the deduction amount correctly.

The Form Full of Benefits 

Senior taxpayers are not forced to file the complicated Form 1040 anymore, even if their income exceeds the $100,000 income and $1,500 interest income limits. The form is more straightforward and adapted for reading with eyesight conditions. Moreover, the taxpayers who are 65 or older achieve a higher deduction when filing single or married. Be attentive while filing the new form, and feel free to get in touch with PDFLiner tax experts via the comments section if something isn’t clear enough.